The Surtax on Capital Gains
16Less well known than Capital Gains Tax (“CGT”), this surtax is payable by the seller when capital gains exceed €50,000. Let us explain.
What is this surtax?
Since 1 January 2013, in any real estate sale that results in capital gains of over €50,000 the seller is obliged to pay a surtax proportional to the gain, which is taxable from the very first Euro. This financial hit is in addition to the “usual” capital gains tax.
The amount of surtax varies between 2% and 6% according to the total taxable capital gains (see table below). These sums are payable via the notary on the day of signature of the contract of sale.
Surtax on capital gains on property in excess on €50,000 – applicable tax brackets
| Amount of taxable capital gains | Surtax/ Total tax rate (surtax + 19%) |
| €50 000 to €100 000 | 2% / 21% |
| €100 001 to €150 000 | 3% / 22% |
| €150 001 to €200 000 | 4% / 23% |
| €200 001 to €250 000 | 5% / 24% |
| €250 001+ | 6% / 25% |
When is this surtax not applicable?
– Sales exempt from CGT
– Sales of land for construction
Note
In addition to these obligatory “financial hits” (CGT and surtax) linked to the sale of a property, there is the mandatory payment of social charges at 15.5%.
Let’s look at an example by way of explanation:
In December 2014, a couple sells a studio for €140,000 that they purchased 10 years ago (in March 2004) for €46,000.
*CGT: €10,690
*Surtax: the net capital gains is greater than €50,000 (€56,263 in this example) so the rate of surtax is 2% (see table above), a sum of €1,312.
*Social charges: here they amount to €11,430
Result: the overall capital gains to be paid = €23,432 (€10,690 + €1,312 + €11,430)
(Source: Cheuvreux Notaires)